Structuring your Board Agenda

I recently delivered a board observation and review of board papers for a client and got into a really useful discussion about items on the agenda and decided that my next blog would cover some of the areas of that discussion. Thanks for the inspiration! Luckily for my readers, this became another example of a governance topic that got me tingly and was something I couldn’t wait to write about so here goes!

“Unsurprisingly, it is also an issue that reaches across to governance problems in other sectors, for example in the hospital and banking reviews aforementioned, Keogh found that some of the issues highlighted in the reviews were not on the Board’s agendas at all because they were not probing in the right areas or gathering independent assurance.” With the Benefit of Hindsight – Learning from Problem Cases Volume 4 (June 2015)

Have you ever been in a meeting and an item arose that in your mind should have only needed to be mentioned but a fifteen minute discussion ensued?

Or, has as occasion passed where you knew a matter warranted a robust discussion but was mentioned only as a fleeting comment? The root of both of these examples can often be found in how the agenda has been structured.

The agenda is usually a one sided piece of A4 paper (of the electronic or tangible type) that tells us what items will be discussed in a meeting. The agenda may seem less important than other papers presented at the meeting such as the strategic report, the budget or a regulatory return, but a well structured agenda is the key to maximising the discussion of those seemingly more important papers to ensure the meeting is effective.

Moving past the visual presentation of the agenda which some may constitute as a ‘good agenda’ because it looks clear, it is the structure of the agenda that really helps to direct the effectiveness of the outcome and with sustained application, the long-term success of the company.

So, what is the ideal agenda structure I hear you ask? Well, every organisation is unique, and as such, requires a unique approach to the administration of it’s board so in that respect, what is presented here is not the answer to everything, but merely a set of recommendations that may assist you in your continued pursuit of good governance and maximising the effectiveness of your board meetings.

Firstly, it is worth noting that the chair should be involved in setting the agenda for the meeting. Sometimes, the CEO may set the agenda but the chair (along with support from the company secretary which is always advised) has a responsibility to provide independent oversight. The FRC recently updated their Guidance on Board Effectiveness (2018)and it states that: “The chair’s role includes setting a board agenda primarily focused on strategy, performance, value creation, culture, stakeholders and accountability, and ensuring that issues relevant to these areas are reserved for board decision.”

Therefore, ensuring that the chair and CEO, along with the company secretary have agreed the content of the agenda can help to ensure the meeting runs smoothly. In addition, the matters reserved for the board should help to direct the content of the agenda. This coupled with the terms of reference outline what exactly it is that the board have a responsibility to do.

Next, there are some key items that should feature on each meeting agenda as standing agenda items. These include:

apologies;

declarations of interests;

minutes (from the previous meeting) and

matters arising (we recommend a robust system of monitoring actions is employed).

Depending on the size and complexity of your organisation, the agenda will then feature a number of reports and updates that cover some of the strategic aspects of the business of the organisation such as finance and performance. As one of the key roles of the board is to make decisions, how your agenda is structured should help to influence this. The FRC Guidance on Board Effectiveness (2018) has this to say in relation to decision-making: “Well-informed and high-quality decision-making does not happen by accident.” This is why we need to be pro-active in understanding how to structure an agenda as a tool in helping us to achieve “high-quality” and robust decisions.

Now we will look at practical guidance on preparing your agenda which should include having some key headings under which reports are placed that help board members to determine how much time is going to be allocated to each item and the outcomes that are expected (therefore assisting them with how to contribute around the item in the meeting).

I recommend that key headings in your agenda should include the suggested headings detailed below, also taking into account the fact that the role of the chair will be to encourage the appropriate amount of discussion around each item based on the category and time allocated. A good agenda provides all members with a list of items for the boards attention and it will also specify the expected outcome from each agenda item, i.e. a decision, a discussion, formal acknowledgement that an item has been presented to the board (usually referred to as noting) or an item provided for information only.

We suggest that all agendas should include these outcomes and our interpretation of some of the common classifications of what these outcomes mean are detailed below. It is recognised that organisations usually adopt and interpret the use of these headings in their own way.

For Noting

Items for noting can be taken as read and don’t require decision, action or discussion. They can be informal and necessary updates and this is where the board may be formally required to note the contents of a report or the receipt of certain information. Noting of the item will be recorded in the minutes providing the required evidence that the contents of the report or information presented were formally acknowledged.

For Approval

Approval could be required for a document, a report, or a project proposal for example. The content of the report may lead to discussion, however, if the item has been presented to a previous meeting as a discussion point, the chair has a role to play in ensuring the discussion moves towards the approval (or disapproval) and does not revisit old ground (except in instances where something may have been missed that if not addressed will negatively impact the outcome).

For Decision

Usually the decision item has evolved from a number of options. These options may find themselves now in the form of a recommendation that requires a decision. So, as the term suggests, a decision item should lead to the board arriving at a decision during the meeting. Content of the report or recommendation is likely to involve discussion, and actions may also arise, either from taking the decision or from matters that arise, as part of the discussion.

For Information

These items do not really form part of the agenda but provide contextual or other useful information for board members to consider in their own time. These matters could include items that have been reported from a committee or things such as success stories from the organisation that the executive want to share with the board, or the sharing of the details of key reports that board members should read for their development. These items do not require any discussion. In this way, the ‘for information’ section of the agenda forms part of the organisation’s document library.

For Discussion

Items for discussion are presented in order to provide the opportunity for the board to consider reports and information provided to them. Any introductions by the executive team or other presenter should complement information provided drawing out key points for discussion and not go over information that has already been circulated. There are occasions where items require extensive discussion without the need for approval or decision. This could occur in circumstances where the executive team may need to know the direction of travel or initial thoughts from the board about a particular area and require a robust discussion. Some organisations may have this as a standalone agenda item but we note and suggest that some discussion also happens for items that are for approval and decision.

This blog couldn’t possibly provide you with guidance that would cover every single eventuality to ensure that the agenda for meetings in your organisation is effective, clear and concise. However, I do hope that the content will help to spark a discussion and review, if necessary, of your agenda as you seek to continually review your governance structures.

There are many boards that are well run, carrying out their oversight function in a robust and methodical manner. The challenge for these boards to enable the move from conformance to generative governance is for them to devote less of the agenda to these compliance matters. By getting the balance of time right on the agenda and categorising the items to be addressed, boards can find the time to be more strategic and allow those discussions to evolve where board members can triangulate their observations, share ideas and concepts and therefore provide great counsel to the executive team with insightful and proactive engagement.

Until next time…

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